Rs 6.5B shareholder wealth wiped out


Rs 6.45 billion worth of shareholder wealth was wiped out at yesterday’s trading due to sustained uncertainty, now caused by yesterday’s unexpected and sharp fuel hikes fanning further inflationary pressure. High inflation makes the fixed income market a more attractive prospect to invest rather than the bourse.

Consequently, the ASPI fell by 0.96 per cent to 8,393.47 points and the S&P SL 20 Index by one per cent to 2,816.45 points at yesterday’s trading. Turnover made yesterday was Rs 2.32 billion on a 307.99 million share volume.

However, the bourse enjoyed a pyrrhic net foreign inflow of Rs 21.67 million yesterday, though in the calendar year to date it has suffered a net foreign outflow of Rs 1.39 billion.

Meanwhile, the guided benchmark market ‘spot,’ administered since last Friday (13 May) closed unchanged at Rs 360/365 to the US dollar in two-way quotes for the sixth consecutive market day to yesterday, market sources told Finance Today.

They further said trades in the administered ‘spot’ (Rs 360/365) were mainly restricted to ‘bank-client’ outright trades, while the interbank foreign exchange (FX) market was however dominated by swaps, which were outside the domain of the FX market for this purpose.

YoY as at yesterday, this administered market ‘spot’ has weakened by between 80.23-82.27 per cent (Rs 160.25-164.75), thereby causing cost-push inflationary pressure, as Sri Lanka is an import-dependent economy.

In related developments, the administered ‘spot’ for official purposes, YoY as at yesterday has depreciated by 79.99 per cent (Rs 159.71). Yesterday, the value of this official administered ‘spot’ was fixed at Rs 359.38 to the dollar, while a year ago it was Rs 199.67. Meanwhile, the administered market ‘spot’ a year ago was Rs 199.75/200.25 to the dollar in two-way quotes.

The official administered ‘spot’ is used for transactions involving only among the GoSL, Central Bank of Sri Lanka (CBSL) and the country’s foreign reserves.

By Paneetha Ameresekere


More like this

No more debt relief for tourism sector – CBSL

A top Central Bank of Sri Lanka (CBSL) official...

Money Printing Tops Record Rs 3Trillion

Government of Sri Lanka’s (GoSL’s) face value money printing...

Two financial institutions fined under anti-money laundering laws

The Financial Intelligence Unit (FIU) of the Central Bank...

China promotes refinancing instead of debt restructuring for Sri Lanka

A spokesman for the Chinese Embassy in Sri Lanka...